Due by 11:59 Tonight

'Word Bank income substitution total diminishing marginal equal consumer budget producer satisfaction Economists use the term utility to refer to the people get om the consumption of goods and services. lDther things being equal, utility of a good is the amount of added utihty that a consumer gains from consuming one more unit of that good- The principle of marginal utility states the greater the consumption of some good: the smaller the increase in utility from a oneunit increase in consumption of that good. The di'erence between what a consumer would wilhngly pay for each unit and the amount actually paid at the market price is the surplus for that unit. The surplus earned on each unit is the di'erence between the market price and the minimum that the producer would have been willing and able to accept in exchange for that unit. . According to the effect, goods that are now relatively more costly= cause the increase in the quantity demanded of a good whose price has fallen, and are now relatively less expensive. . According to the effect, a decrease in the price of a produce leads buyers to feel as though their income or budget has increased. Consumer equilibrium is a state of a'airs in which a consumer cannot increase the utility gained from a given budget by spending less on one good and more on another. Consumer equilibrium is achieved when the ratio of the marginal utility of one good to its price is to the ratio of the marginal utility of another good to its price